The present invention relates generally to systems and methods for conducting financial transactions and, more particularly, to security systems and methodologies for identifying customers and determining approvals for financial transactions, including for example but without limitation cash-out transactions performed by banks and other financial institutions or businesses.
Historically, banks, other financial institutions, retail businesses and the like have relied on customer identification as a principal means of security in cashing or accepting checks, issuing cash withdrawals from accounts, other forms of so-called "cash-out" transactions, and other similar or related forms of financial transactions. In decades past, customers tended to routinely patronize the same local bank and other establishments, and, likewise, the turnover rate among employees was relatively low, whereby such establishments could rely heavily on the ability of bank tellers and other employees to visually recognize customers. Over recent years, however, with the phenomenal growth and expansion of businesses of all types, including the increase of branch banking, increasing mobility of society in general, and similarly increasing rates of turnover among retail and customer service employees generally, particularly evidenced by high turnover of bank tellers, it has become nearly impossible to rely upon visual identification of customers as a means of security in conducting checking, cash-out and other financial transactions. During this period of time, the incidence of customer fraud in the cashing of checks and other similar transactions has grown to alarming levels.
As a result, it has been widely accepted for some time within the banking, financial and retail industries that reliance on visual identification of customers is a wholly inadequate means of security in conducting financial and other like transactions, yet many customers, particularly regular bank depositors and other repeat customers, resent the imposition of high levels of security. Accordingly, these businesses and establishments have been continually seeking new ways to address the need for a reliable system of security in identifying customers as part of the process of approving or disapproving financial and other like transactions which balances the goal of attempting to eliminate customer fraud while minimizing the intrusiveness of the security measures to the customer.
One means of substantially reducing and even largely eliminating losses to fraudulent transactions would be for banks to refuse to cash or accept checks of non-depositors and for other businesses similarly to refuse non-cash transactions with persons other than regular customers, but such a policy presents equally negative public relations problems and customer dissatisfaction. Perhaps the simplest and most common means of customer identification in such transactions is to require a customer to present a recognized form of photographic identification, such as a driver's license, passport, or the like. Unfortunately, the ease with which such forms of photographic identification can be tampered or otherwise altered has made this form of security less than adequate. Businesses, including banks, continue to lose large sums of money on fraudulent transactions in which customers utilize false forms of identification.
Other customer identification schemes have involved requiring non-regular customers to submit to thumb printing in order to complete transactions. While such programs have proven highly effective in minimizing check cashing fraud, the negative reaction and perception of many customers to such programs has prevented banks and other businesses from larger scale implementation of this security measure. Much more sophisticated electronic systems for visually identifying customers are available. While customer reaction to such systems is very positive in that the systems are largely passive in operation, currently available systems are quite expensive, particularly if implemented across a large number of business locations, e.g., bank branches, making it more difficult for businesses to justify the expense in comparison to losses which could be expected without such a security system.